Crude Oil Radar

OPEC Market Analysis

Crude Oil Price Movements

In January, the OPEC Reference Basket (ORB) value rose by $0.61/b, month-on-month (m-o-m), to average $62.31/b. The ICE Brent front-month contract increased by $3.10/b, m-o-m, to average $64.73/b, while the NYMEX WTI front-month contract rose by $2.39/b, m-o-m, to average $60.26/b. The GME Oman front-month contract saw a rise of $0.83/b, m-o-m, to average $62.79/b. The Brent–WTI front-month spread increased by $0.71/b, m-o-m, to average $4.47/b.

The forward curves of all major crude benchmarks strengthened, with the front end of the curves for both ICE Brent and NYMEX WTI moving into stronger backwardation. This shift was supported by oil supply outages, easing selling pressure from speculators, and robust physical market fundamentals. Speculative sentiment turned bullish, with hedge funds and other money managers sharply increasing their net long positions.

World Economy & Macroeconomic Backdrop

The global economic growth forecasts remain unchanged at 3.1% for 2026 and 3.2% for 2027. The US economic growth forecast is slightly revised up to 2.2% for 2026, while remaining at 2.0% for 2027. The Eurozone's growth forecast remains at 1.2% for both years, and Japan's forecast is steady at 0.9%. China's growth forecast is maintained at 4.5%, and India's forecast is at 6.6% for 2026 and 6.5% for 2027. Brazil's growth is forecast at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to play significant roles in shaping the economic landscape over the next few years.

World Oil Demand Trends

The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The OECD is expected to increase by 0.15 mb/d, while the non-OECD is forecast to grow by about 1.2 mb/d. In 2027, global oil demand is projected to grow by approximately 1.3 mb/d, y-o-y, with the OECD growing by 0.1 mb/d and the non-OECD increasing by about 1.2 mb/d.

Key demand drivers include economic growth in emerging markets, while constraints may arise from geopolitical tensions and shifts in energy policies.

World Oil Supply Analysis

Non-DoC liquids production is forecast to grow by about 0.6 mb/d, y-o-y, in 2026, driven primarily by Brazil, Canada, the US, and Argentina. This growth is expected to continue into 2027. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are projected to grow by 0.1 mb/d, y-o-y, in both 2026 and 2027. In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs due to stronger feedstock prices and seasonal demand-side pressures. In the US Gulf Coast, losses were attributed to increased availability of heavy crude supplies. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore also saw a decline driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates had a robust start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates reached the highest levels for the month in at least a decade, up by 64% y-o-y. Suezmax rates also rose amid weather disruptions, while Aframax spot freight rates experienced strong performance, reaching a 10-year high. In the clean tanker market, rates were led by East of Suez, with significant increases noted.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, consistent with the five-year average, while exports rose to 4.2 mb/d. In OECD Europe, crude imports declined due to lower flows from Kazakhstan. Japan's crude imports surged, and China's crude imports reached a record high. India's crude imports remained elevated, despite a slight decline, while product imports showed mixed trends.

Commercial Stock Movements

Preliminary December data shows OECD commercial oil inventories rose by 6.5 mb, m-o-m, to 2,845 mb. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb. OECD crude oil commercial stocks stood at 1,363 mb, which is 75.5 mb higher y-o-y. The days of forward cover rose by 0.7 days, m-o-m, to stand at 62.8 days.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 remains at 43.0 mb/d, which is about 0.6 mb/d higher than in 2025. For 2027, the demand is also unchanged at 43.6 mb/d. The following table summarizes the supply-demand balance for the upcoming years:

The analysis indicates a supply-demand gap for DoC crude, with a requirement of 43.0 mb/d in 2026 and 43.6 mb/d in 2027, highlighting the strategic importance of production decisions moving forward.